Summary Ahead of Trump’s big tariff announcement tomorrow afternoon, global interest rates were dragged lower. EU CPI and PMI readings were an early catalyst, while US data was more mixed. JOLTS jobs numbers continued to drift lower, while March ISM was the latest data set with shades of stagflation, reporting decelerating growth and accelerating prices. Gold prices touched fresh at all-time highs above $3,160. Most sectors within the S&P traded flat to lower, while discretionary outperformed following a strong PVH earnings report. WTI crude price leveled off above $71.00 helped in part by renewed reports OPEC+ producers will follow through with plans to gradually begin raising production.
As of this typing stock index futures and other futures contracts have experienced single-day downward moves not seen in years: → E-mini Dow Jones: down ±1,600 points / 3.7% → E-mini S&P 500: down ±260 points / 4.5% → E-mini Nasdaq: down ±1,025 points / 5.1% → E-mini Russell 2000: down ±128 points / 6.2% With tomorrow ushering in the Labor Dept.’s release of its monthly Non-farm payrolls report and the furtherance of what looks to be the beginning of a global trade war, expect no drop-off in market volatility. Traders not only need to be extra cautious in making trading decisions, it’s also important to be aware of important aspects of the markets they’re trading. Key among these are the daily price limits of the markets you’re trading. A price limit is the maximum price range permitted for a futures contract in each trading session. When markets hit the price limit, different actions occur depending on the product being traded. Some markets may temporarily halt until price limits can be expanded or trading may be stopped for the day based on regulatory rules. Different futures contracts will have different price limit rules; i.e. Equity Index futures have different rules than Agricultural futures. Price limits are re-calculated daily and remain in effect for all trading days (except in certain physically-deliverable markets, where price limits are lifted prior to expiration so that futures prices are not prevented from converging on prices for the underlying commodity). Equity Indexes futures have a three level expansion: 7%, 13% and 20% to the downside, and a 7% limit up and down in overnight trading. Follow the links below to the CME Group web site to find more information on price limits generally and specific price limits for the markets you’re trading: Find daily price limits for CME Group Agricultural, Cryptocurrency, Energy, Equity Index, Interest Rates, and Metals products: click here. Trading levels for NFP Friday, April 4th and Reports and fed Speakers Schedule on our blog.
In this week's Cannon Futures Weekly Letter, we explore essential topics such as price limits, market volatility driven by tariffs, and the upcoming FOMC minutes. Our analysis includes a technical course on trading strategies, highlights on May Bean Oil, and a featured trading system, the Abacus Raider NQ Day Trading System. Stay informed and enhance your trading skills. #FuturesTrading #MarketAnalysis #TechnicalAnalysis #TradingEducation #EconomicInsights
The S&P fell below 5K and the VIX spiked to 60 before NYSE trading got underway. US markets were looking down another ~5% and approaching bear market territory as President Trump and his team were out in force making the case that their trade policy will work and is not going anywhere, anytime soon. Nevertheless, US indices saw a wild move up from an erroneous headline on a 90-day tariff pause, that revealed just how coiled the spring is for equities should the President change course or declare victory. The eye popping ~400 handle rally in the S&P off of "fake news" was driven by technology, Mag 7 names and resulted in support around that 5K mark. Treasury yields surged led by selling at the long end of the curve despite the risk off move globally, which may have aided the underlying bid in stocks from the lows. Jamie Dimon flagged the inflationary impulses and risks of recession emanating from the Trump tariff policies in his latest annual letter to shareholders. Blackrock's Fink said he is hearing we are already in recession when speaking with CEOs. Trading levels for April 8th below:
FOMC Minutes, 10 yr notes auction and crude oil numbers in addition to already very volatile market. Levels for tomorrow below:
The market is experiencing unprecedented volatility with significant price movements across indices and commodities. Traders must adapt quickly to these changing conditions. Focus on setting daily profit targets and loss limits to manage risk effectively. Stay informed about price limits and utilize tools like PriceCount for better decision-making. #TradingStrategies#MarketVolatility#RiskManagement#FuturesTrading#CPI
Discover the advantages of 0DTE options in today's volatile market. These short-term options can serve as an effective alternative to day trading, allowing you to harness daily market movements with limited risk and significant upside potential. Explore how stock index futures options can enhance your trading strategy. #0DTE#OptionsTrading#FuturesTrading#MarketVolatility#TradingStrategy Levels for tomorrow:
From our friends at TradeTheNews.com, click here for a FREE trial: It was a week for the trading history books as markets were jolted by President Trump’s decision to pivot on his tariff policy. Monday saw the VIX spike to 60 and S&P testing below 5K, nearing bear market territory as Trump and his team were out in force making the case that their trade policy would be effective and would not budge anytime soon. Importantly, Treasury Secretary Bessent appeared to take the lead on Administration messaging which seemed to hearten investor psyche. On Monday, stocks ripped more than 400 S&P handles mid-session on reports of a 90 day tariff pause, which the White House quickly labeled as fake news. Officials did emphasize that Japan and South Korea had moved to the front of the line in trade talks with as many as 70 countries underway. By Wednesday the game of chicken being played by the Trump Administration and global markets may had reached a crescendo when the President did indeed announce a 90 day pause on all reciprocal tariffs, excluding China. Tariffs outside of China were reset to a base of 10%, while China levies rose to a whopping 145% effective rate. The Administration touted the decision as an opportunistic chessboard move to apply maximum leverage and isolate China while the US hammers out tailored deals with trading partners around the world. Others argued that a sharp rise in US Treasury yields overnight signaled forced deleveraging in the bond market, as well as rising odds of a recession, finally forced the President's hand to walk back the global trade war. Trump himself acknowledged all were factors in his game-changing truth social post. The notion of increased certainty, even if for just three months, sent stocks soaring, while the short end of the UST curve sold off as long rates briefly stabilized. The NASDAQ had one of its best days on record, jumping 12%, and the S&P rose nearly 10%, while the VIX had a record 35% drop. The S&P went out above 5450, trading back to ~20x FY26 earnings estimates, which are still likely to come down. WTI crude fell towards $55, or 7%, after the China retaliation announcement earlier in the day, only to rally 13% off the lows. Heading into the weekend investors were suffering through a severe case of whiplash. US stock markets relinquished more than a third of Wednesday gains. Despite Trump’s pause, effective tariff rates are still up significantly, and the implication for growth and inflation is clearly not positive as opined by a wide array of economists, corporate leaders, and Federal Reserve officials. The trade war between the world’s two largest economies continued to escalate. Positive news embedded the March CPI and PPI and the Republican’s ability to pass a fiscal framework on Capitol Hill were overshadowed by what appeared to be waning demand for the US dollar and Treasuries. US stock markets repeatedly seesawed with a tight negative correlation holding between US stock indices and Treasury yields as concerns about the bond market grew. The benchmark 10-year yield climbed back above 4.5% and gold prices hit fresh all-time highs above $3,250 per ounce. Stocks finished the week on an up note, helped in part by Fed officials who indicated they stand ready to step in should bond market trading get disorderly, while highlighting that markets continue to function well at the moment. There may also have been some strategic short covering in the event we see a firm trade deal announcement over the weekend. For the week, the S&P zigzagged its way up 5.7%, the DJIA added 5%, and the Nasdaq rose 7.3%. Tariffs remained top of mind as corporate leaders began to comment on first quarter results. Earnings season got off to a promising start with a number of major banks reporting solid numbers. JP Morgan, Wells Fargo, and Morgan Stanley handily beat earnings expectations and largely affirmed guidance for the fiscal year despite the recent rise in uncertainty. JP Morgan CEO Jamie Dimon did have some cautionary notes, however, saying amid persistent sticky inflation a recession is now the likely outcome, and that earnings estimates across the S&P500 names will fall as companies start to withdraw guidance. Delta was among the first to do so, posting decent Q1 results, but withdrawing guidance as growth has “largely stalled.” Amazon reportedly canceled some inventory orders from China after the US tariff announcement, though CEO Jassy said during an extensive CNBC interview that it’s too early to say we have seen any real change in consumer behavior. Rival Walmart also presented an air of calm, affirming Q1 and fiscal year growth guidance of 3-4%, while acknowledging the range of outcomes had widened. Auto makers also continued to react to the tariff threat: Notably BMW said it has about a month of inventory remaining in the US and was contemplating adding a shift at its South Carolina plant to avert some duties. MON 04-07 (CA) PM Carney: Difficult for Canada to avoid a recession if the US has one; US is driving itself into recession (CN) CHINA MAR FOREIGN RESERVES: $3.24T V $3.252TE [highest since Nov 2024] (US) Reportedly China is not likely to yield to Trump threat of additional 50% tariffs following retaliation from China on newly imposed retaliatory tariffs - WSJ (EU) EURO ZONE APR SENTIX INVESTOR CONFIDENCE: -19.5 V -9.0E (lowest since Oct 2023) (EU) Reportedly EU Commission proposes counter-tariffs on range of US imports at 25% in response to US steel duties, said will take effect May 16th - press (US) Association of American Railroads weekly rail traffic report for week ending March 29th 513.6K total units, +8.6% y/y (update) (US) Businesses and lawyers said to plan legal challenge to Pres Trump tariffs; Could be filed as soon as Fri (April 11th) – ABC (US) FEB CONSUMER CREDIT: -$0.81B V +$15.0BE (US) Fed's Goolsbee (voter): Fed policy makers are 'hearing anxiety' - CNN Interview (US) Fed's Kugler (voter): Tariffs and shortages are important to consider when forecasting what inflation will do; Inflation expectations have moved up (US) March Manheim wholesale used vehicle Index: 202.6 v 200.8 prior; +2.7% m/m; -0.2% y/y (update) (US) President Trump is planning to sign executive order related to supporting the coal industry on Tuesday at 3:00 PM ET; Trump to also deliver remarks at the NRCC dinner on Tues at 6:45 PM ET - US press (US) Pres Trump said to consider exporter tax credit to offset tariff risk from foreign buyers - press (US) Pres Trump: 'Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th. Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately. Thank you for your attention to this matter!' - Truth Social post (US) Reportedly Trump Administration will increase payment rates 5.06% for Medicare insurers in 2026 – WSJ 005930.KR Reports prelim Q1 (KRW) Op 6.60T v 5.74Te (v 6.60TB y/y), Rev 79.0T v 76.6Te (v 71.0T y/y) BLK CEO Fink: Views the current market as a long-term buying opportunity Global Logistics Update: April demand is higher than in March, with an uptick in volume supporting increased cargo liftings compared to March; Floating market rates this week, with rates stabilizing at current levels. - Flexport (update, last week) TUES 04-08 (CN) US Pres Trump said to consider changes to China port fee plan following pushback from businesses – press (DE) Germany parties CDU/CSU and SPD said to reach agreement on coalition - German press (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) CUTS OFFICIAL CASH RATE (OCR) BY 25BPS TO 3.50%; AS EXPECTED (UR) Pres Zelenskiy: Ukraine forces fought six Chinese soldiers in Donetsk (eastern Ukraine) and captured two of them; One more country has joined Russia's war (US) Fed's Goolsbee (voter): Tariffs are much more than what we had been modeling; Businesses are reporting uncertainty and anxiety on tariffs; Not obvious how Fed would react to a negative supply shock - radio interview (US) TREASURY'S $58B 3-YEAR NOTE AUCTION RESULTS: DRAWS 3.784% V 3.908% PRIOR; BTC 2.47 V 2.70 PRIOR AND 2.60 OVER THE LAST 8 AUCTIONS (tailed 2.4bps) (US) Pres Trump said to be open to idea of raising taxes on highest incomes at Senate Republican meeting (taxing highest earners had been previously floated) – Semafor (US) US Pres Trump: We need more than double the electricity in the US; Signs four EOs related to coal power (US) USTR Greer: Have had several conversations with Japanese officials in past week; Reiterates that higher reciprocal tariffs will go into effect tomorrow - comments to Senate Finance committee MU Reportedly to impose tariff related surcharges on some products beginning on April 9th - press (update) SOBO.CA (US) Keystone oil pipeline (capacity 591K bpd) in North Dakota said shut due to rupture – press WBA Reports Q2 $0.63 v $0.53e, Rev $38.6B v $37.9Be; Withdraw FY guidance due to pending acquisition by Sycamore WEDS 04-09 (CN) CHINA MAR CPI Y/Y: -0.1% V 0.0%E (CN) China Mar Preliminary Retail Passenger Vehicle Sales M/M: +14.0% v -22.8% prior – PCA (CN) CHINA RAISES RECIPROCAL TARIFFS ON US GOODS FROM 34% TO 84% (+147% increase compared to prior), EFFECTIVE THURS, APR 10TH (DE) New Germany govt coalition (CDU/CSU and SPD): Plans budget consolidation and aims to complete debt-brake reform in 2025; Plans cuts to voluntary funding for international organizations; Will deport people to Syria, starting with criminals and potentially dangerous persons; To introduce new EV purchase incentives - joint statement (IR) Iran Pres Pezeshkian: Ready to give guarantees we are not after nuclear weapons - State TV (KR) South Korea's Top Envoy met with USTR Greer to lower tariff rates on South Korea (US) Announcement may come as soon as today on formal US tariff negotiations with Japan, Vietnam and possibly UK - Fox's Gasparino in X post (US) DOE CRUDE: +2.5M V +2ME; GASOLINE: -1.6M V -1ME; DISTILLATE: -3.5M V +0.5ME (US) FEB FINAL WHOLESALE INVENTORIES M/M: 0.3% V 0.4%E (US) Fed's Musalem (voter): Expect economic growth this year materially below estimated 2% trend; See higher inflation risk (US) FOMC MAR MINUTES: MOST OFFICIALS SAW POTENTIAL FOR PERSISTENT INFLATION FROM VARIOUS FACTORS; EXPECT HIGHER INFLATION THIS YEAR FROM TARIFFS; SAW HIGH UNCERTAINTY DAMPENING SPENDING, HIRING, AND INVESTMENT (US) Treasury Sec Bessent: Countries who didn't retaliate against tariffs will be rewarded; Confirms tariff increase on China due to escalation; Mexico and Canada included in universal 10% tariff; April 2nd was ceiling for reciprocal tariffs, today represents the 10% floor (US) Treasury Sec Bessent: China's new 84% tariff is 'unfortunate'; Escalation is 'a loser for them' - comments from Fox Business (US) TREASURY'S $39B 10-YEAR NOTE REOPENING DRAWS 4.435% V 4.310% PRIOR; BID-TO-COVER RATIO: 2.67 V 2.59 PRIOR AND 2.57 OVER LAST 8 REOPENINGS (US) US Pres Trump: Authorizes a 90 day reciprocal tariff pause (ex-China); Tariffs set to the minimum 10% level, effective immediately; Raises China tariffs to 125% from 104% after retaliation - Truth Social AMZN Said to cancel some inventory orders from China after US tariff announcement; Products affect multiple products and vendors – press DAL Reports Q1 $0.46 v $0.40e, Rev NG $13.0B* v $13.8Be; Growth has largely stalled; Cuts capacity; Withdraws FY25 outlook due to uncertainty JPM CEO Dimon: Reiterates that sticky inflation won't go away as fast as people thought; Probably a recession is a likely outcome; Not yet seen defaults, but expecting them - Fox Business interview STZ Reports Q4 $2.63 v $2.28e, Rev $2.16B v $2.13Be; Announces new 3-yr, $4B share repurchase authorization; Guides below estimates WMT Affirms Q1 and FY26 Rev growth guidance +3-4% y/y; Range of outcomes for Q1 operating income growth has widened due to less favorable category mix, higher casualty claims expense, and the desire to maintain flexibility to invest in price as tariffs are implemented. THRS 04-10 (CN) CHINA'S PREVIOUSLY ANNOUNCED INCREASED RECIPROCAL TARIFFS ON US GOODS FROM 34% TO 84% GO INTO EFFECT , [00:01 ET APRIL 9TH / 04:01 GMT] (CN) Chinese Officials secretly acknowledge role in "Volt Typhoon" infrastructure hacks during December meeting – WSJ (CN) Reportedly EU agrees to start negotiations to abolish tariffs on Chinese EVs - press (CN) EU leaders said to plan July trip to Beijing to meet for a summit with Chinese Pres Xi – press (JP) Japan Econ Min Akazawa: No specific date set for US visit, haven't made first contact with US side on tariffs; US imposition of tariffs on steel and autos is regrettable (JP) Japan Econ Min Akazawa: Aware that Treas Sec Bessent has raised FX and non-tariff barriers as a topic; Bessent can be a tough negotiator - financial press (US) Atlanta Mar Feb Sticky-CPI (12-month annualized) 2.2% v 3.1% m/m; Core Sticky CPI (1-month annualized) 2.0% v 2.9% m/m (update) (US) Fed's Collins (voter): Might still be appropriate to cut this year; 10% effective tariff rate may push inflation well above 3%; Monetary policy is well positioned for a range of outcomes (US) Fed's Goolsbee (voter): Fed must act if long-term inflation rise; 10% global tariffs would materially raise inflation; Fed should keep all policy actions on the table - comments to press (US) Fed's Goolsbee (voter): Fed's timetable isn't the market's timetable; Out goal is to find the through line, not jump to conclusions - speech text (US) MAR CPI M/M: -0.1% V 0.1%E; Y/Y: 2.4% V 2.5%E (annual pace lowest since both Sept 2024 and Mar 2021) (US) TREASURY $22B 30-YEAR BOND REOPENING DRAWS 4.813% V 4.623% PRIOR; BID TO COVER 2.43 V 2.37 PRIOR AND 2.42 OVER LAST 8 REOPENINGS (US) US Pres Trump: The first deal on tariffs is very close, but it has to be a good deal; Does not consider exceptions for companies right now; Asked about potential for extending the 90 day tariff pause, says "we'll see what happens at that time" - US Cabinet Meeting (US) US Pres Trump threatens additional tariffs on Mexico over 1944 Water Treaty; Just last month, I halted water shipments to Tijuana until Mexico complies with the 1944 Water Treaty Global Logistics Update: Trans-Pacific Eastbound (TPEB) shipping capacity has been significantly reduced for April, with approximately 20% of market capacity removed due to a rise in blank sailings – Flexport 2330.TW Reports Mar (NT$) Rev 286.0B, +10% m/m and +46.5% y/y; YTD Rev 839.3B v 836.0Be, +41.6% y/y v +16.5% prior 9983.JP Reports H1 Net ¥233.6B v ¥195.9B y/y, Op ¥304.2B v ¥257.1B y/y, Rev ¥1.79T v ¥1.60T y/y; Raises FY profit and dividend guidance AMZN CEO Jassy: We know customers care about selection and price and will do everything we can to offset tariffs; Too early to say we have seen any real change in consumer behavior – CNBC BMW.DE Said to have ~30 days of inventory in US with some parts and components inventory; Considering adding shifts at Spartanburg (SC) plant to increase production by up to 80K units/yr - press cites analyst note ITT Reports prelim Q1 $1.43-1.45 v $1.43e, Rev >$900M v $902Me KMX Reports Q4 $0.64* adj v $0.64e, Rev $6.00B v $5.97Be NOVN.CH Plans to spend $23B to build and expand 10 US facilities over five years and generate 4K+ jobs – press STM.FR Expects up to 2.8K voluntary job cuts as part of company-wide program to reshape manufacturing footprint and resize global cost base FRI 04-11 (US) APR PRELIMINARY UNIVERSITY OF MICHIGAN CONFIDENCE: 50.8 V 53.5E; 1-year inflation expectations 6.7% v 5.2%e; 5-10 year inflation expectations 4.4% v 4.3%e (US) MAR PPI FINAL DEMAND M/M: -0.4% V 0.2%E; Y/Y: 2.7% V 3.3%E (UK) FEB MONTHLY GDP M/M: 0.5% V 0.1%E WorldACD Weekly Air Cargo Trends: worldwide air cargo tonnages -7% w/w (CN) CHINA RAISES TARIFF ON US GOODS TO 125% (FROM 84%); EFFECTIVE APR 12TH; WILL IGNORE FURTHER TARIFFS IF IMPOSED (CN) China Semiconductor Industry Association (CSIA) reportedly says some chipmakers are exempt from retaliatory US tariffs based on location of fabrication - press (CN) US officials warned China against retaliating in private tallks; US told Chinese counterparts to request a phone call between US Pres Trump and China Pres Xi - CNN (IN) India trade official: India and US have finalized terms of reference for talks on first segment of bilateral trade deal; Sees possibility of 'win-win shape and form' US trade deal in next 90 days: Expect US VP Vance to come to India soon - press (JP) Japan Econ Min Akazawa: Will visit US for trade talks on Thurs, Apr 17th (US) Fed's Collins (voter): Tariffs will push up inflation pressures; Expects inflation 'well over' 3% this year; Markets continue to function well; Won't rule out an economic downturn - press interview (US) Fed's Musalem (voter): Distinct possibility that inflation rises even as labor market softens; Uncertainty is high and Fed policy is well positioned (US) Energy Sec Wright: We can follow the ships from Iran, we know where they go, We can stop Iran's export of oil; Market can tolerate 'squeezing out' of Iranian oil exports - TV interview JPM Reports Q1 $5.07 v $4.62e, Managed Rev $46.0B v $43.2Be JPM Affirms FY25 NII ex-markets ~$90B, adj expense outlook ~$95B v ~$91.5B y/y ($90B, $95B) - earnings slides WFC Reports Q1 $1.39 v $1.23e, Rev $20.2B v $20.8Be BK Reports Q1 $1.58 v $1.49e, Adj Rev $4.79B v $4.74Be BLK Reports Q1 $11.30 v $10.43e, Rev $5.28B v $5.38Be; Inflows miss expectations